August 31st, 2005

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Movies
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Zip.ca Buys VHQOnline

Travis reports that Zip.ca has purchased VHQ Online. According to the Globe and Mail, Zip.ca is the largest DVD by mail company in the country, and they just ate their biggest competitor:

Terms of the deal were not disclosed. However, Zip.ca chief executive officer Rick Anderson said the acquisition of VHQ Entertainment Inc.’s on-line DVD rental business in Canada gives the company an inventory of 220,000 discs, more than twice the size of any other firm in the country.

I’ve never used either service, but my very unscientific impression has been that Zip.ca has traditionally offered lousy service, while VHQ has offered decent service. A quick Google search gets you some very negative reports on Zip.ca in the top ten (Boris’s page is one of my favourite examples of not owning the online conversation). This site, with a very small sample group, ranks VHQ slightly better.

Heather, a former VHQ Online customer, is bummed about the move.

Comments: 5 Responses so far

Richard
August 31st, 2005
8:11 pm

If Zip.ca owned the conversation about their company, wouldn’t that mean that they’d be controlling it as well? They should have been–in Boris’ post and elsewhere–explaining why people might have been having problems (apologizing if necessary), correcting inaccuracies and misinterpretations, and of course, listening. In other words, they should be participating in the conversation, not owning it.

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Darren
August 31st, 2005
8:38 pm

There’s an Internet truism: “if you don’t create a place for people to talk about your products and services, they’ll make their own”. I’ve seen it proven over and over again.

If Zip had a public forum, blog or other feedback mechanism, most or all of the comments on Boris’s site would go away. Which is preferable for Zip.ca–those comments on their own site, where they can monitor and manage them closely, or out on Boris’s site, where they have no control?

Say, for example, someone posts a slanderous lie on Boris’s site. Say it appears at the bottom of the first page of comments. Even if Zip is monitoring the Web closely (which clearly they’re not), and they reply promptly to defend themselves, say they show up on page two. Or say there are five long comments in-between the lie and the response. Bad news for Zip. If the slanderous lie appears on their own site, they can delete it, edit it or reply to it where they see fit (in accordance with their publically available terms of use).

95% of Zip users don’t have a blog. They’re going to seek the path of least resistance to air their greivances. When they didn’t find a feedback mechanism on Zip’s site, they went to the next best thing.

Yes, participating in the conversation as you describe is important, but that process starts with your own site. Today, in this example, that’s probably 80% of the battle.

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Gwen
September 1st, 2005
5:40 am

I have to say that I’ve never had a problem with zip.ca (other than the fact that they don’t seem to care that their English site keeps popping up bits of French text every now and then). The turnaround on returned DVDs is quick and it only takes a day for the DVDs to reach me. For now I’m getting my money’s worth.

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Lincoln
September 1st, 2005
9:40 am

I think Zip got a bit of a bad rap in their infancy. I’ve been subscribed for a year now, and have had absolutely no problems. I don’t hear much from them, other than when they ship me a new disc, but it’s been perfect up until now.

I completely agree about owning the conversation — their marketing strategy seems pretty scattered, including their customer relations. I would *seriously* love to take a whack at fixing their marketing efforts. :-)

Lincoln

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David Oberst
September 4th, 2005
11:31 pm

For those interested in online DVD rentals, I have a website with some comparative information (dvdinfo.ca). There is also a good set of discussion forums (and some reviews) at onlinedvdrentalguide.ca (aka ODG).

The problem with things like the “Boris” (bmann) blog (or the one at mikesmit.com) is that the comments are mostly anonymous and one-off, so they tend to be ranty, and it is often difficult to determine how reliable the poster is, how widespread (or real) the problem might be, etc.

ZIP certainly has its problems, quirks and flaws, but it also managed to attract 20,000 relatively happy customers (I’m one). VHQ seems to have had around 4000, and I doubt any of the other Canadian companies approach even that.

BTW and FWIW, a number of the “Boris” blog complaints on ZIP seem to come from last fall - ZIP went through some sort of growth spurt around then, and Customer Service apparently was abysmal for awhile (phone lines were not active, emails were not responded to or were uselessly automated, etc). ZIP has always been a little klunky and robotic in some of its procedures (VHQ seemed to be known for fairly smooth customer service).

It looks like ZIP will be the big cheese until the US companies look north. I don’t know what their funding sources are like, but I’m not sure if they can grow fast enough to stay on top if Netflix/Blockbuster/Amazon should appear anytime soon (which may not be likely given their current battles in the US). ZIP’s arrangement to provide service for Rogers may also have some options for future funding or buyouts, but if not I’d hope they’ll do more of the customer-friendly stuff that Greencine in the US seems to do, and become a destination for discerning customers.

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